Wondering how much you can stand to make swing trading? Many traders expect and look for some kind of fixed rate of return on their trading. They do this with the intent of making sure that any avenue they follow is worth the time and energy they put into it. The problem is, however, that there is no way you can properly calculate any kind of average return from swing trading or any style of trading. Of course one can speculate by looking at what other swing traders earn, but the problem with this is that no two traders are alike. You may know of a trader who makes a constant 10% return on their account per month. However, this does not mean that you or any other trader is capable of doing this.
One should never assume that you can expect the same returns as other traders do from your own swing trading. Each method and interpretation of markets varies from trader to trader. Swing trading is not an exact science and there is always some kind of guess work involved. This does not mean that swing traders guess and their returns are purely random, but instead means that you may view a market and a trade setup completely differently from another trader and as a result the return you get from swing trading will be different. Furthermore, the kind of trading style and money management greatly affects the rate of return. Some traders don’t mind risk and you may find that they trade with larger and higher amounts of their capital than you would be comfortable with. By doing this they not only increase the amount of risk they expose themselves to but also they increase the expected rate of return. If you prefer to trade relatively small sizes and are risk adverse, then it would be incorrect to assume that you can expect the same kinds of returns from trading as someone who doesn’t mind risk and enjoys placing large trades into the market.
Another factor which can greatly affect the kind of returns you get from swing trading is just how much time you devote to trading in general. A trader who trades full time and watches the market for 8 hours or more a day, would obviously stand to potentially have a much higher rate of return than a part-time trader who only watched the market once or twice a week. Furthermore, just how trades are handled and managed can greatly affect the outcome of a trade. Where you decide to close out and exit your trade locking in profits or losses, might be very different from someone else. Swing trading isn’t an exact science and many factors can greatly affect the outcome of a trade.
It would be best advised not to base your own expected returns from swing trading on what other traders you know or see personally experience. Trading is not a science and a lot of subjective judgment goes into the entire process of swing trading. Many factors from how risk adverse you are, how much time you are prepared to devote to swing trading and the size of your trading account can greatly affect the kind of returns you will get.